USDA says ethanol prices recovering faster than corn price increasing; distillers grains up $20 per ton

The USDA Agricultural Marketing Service reported that the average rack price of ethanol in October fell to 45 cents below the comparable price for gasoline.

In August, the ethanol rack price had been 10 cents higher than conventional gasoline. However, the Service reported that, by November, ethanol prices had recovered to $1.87, up from a low of $1.49 in September.

In August 2007, the average rack price of ethanol in Omaha, Nebraska was $.10 per gallon higher than the average rack price of unleaded gasoline.

The price for corn grew $0.39 per bushel during the same period (adding roughly 14 cents to the production cost per gallon), while the price of distillers grains increased $20 per ton.

The impact of the news is increased margin from ethanol operations, and a lower cost of capital for ethanol development projects.

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